Earnings Call: Q1 2022

Jul 23, 2021

Good afternoon, ladies and gentlemen. I'm Bharti, moderator for the conference call. Welcome to Q1 FY 'twenty two Earnings Call of India Energy Exchange, hosted by Axis Capital Limited. As a reminder, all participants will be in listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note this conference is recorded. I would now like to hand out the floor to Mr. Sumit Kishore of AXIS Capital Limited. Thank you. And over to you, sir. Thank you, Bharti. Good afternoon, ladies and gentlemen. On behalf of Axis Capital, I'm pleased to welcome you all for the Indian Energy Exchange Q1 FY 'twenty two earnings conference call. We have with us the management team of PayEx, which is represented by Mr. Fatimaran Doed, Executive Chairman and Managing Director Mr. Vinit Harmalka, our Chief Financial Officer and Mr. Purna Ghalsa, Investor Relations. We also have the entire management team. We will begin with the opening remarks from Mr. Goel, followed by an interactive Q and A session. Over to you, sir. Good afternoon, dear friends. I welcome you all to the Q1 FY 'twenty two Earnings Call. Present with me today are Mr. Vinit Harelalsa, Mr. Rajesh Majidasa, Mr. Rohit Payal, Mr. Amit Kumar, Mr. Sanghossam, I hope all of you, your teams and families continues to be safe and healthy. The second wave of COVID-nineteen is almost behind us. April May were harsh times for all of us. The second wave has left We embarked on India's macroeconomic indicators during the quarter. However, it is happening to now see that things are getting better. A significant reduction in number of active cases and a competitive pickup in the face of accident drive by the government. During these time times, EMIX has been working at its best to ensure uninterrupted 20 fourseven access to that exchange platform and provide the industries and distribution utilities round the clock access through power exchange, facilitating them from 17th February 2021 and is participating regularly. We are in discussion with Banwaje and Bhutan, and I'm expecting them they will also In line with our customer centric approach, we launched Phase 1 of the web based platform For the market participants providing anytime, anywhere secure and easy access to the platform besides benefits such as client sites, online client audit system as well as the operational financial reports. We also implemented to provide the global 1st in class trading available to our participants and support Introduction of complex bid orders to meet the requirement of dynamically changing sectors. The real time necessity market has been seeing a significant growth And making a meaningful contribution and has been able to establish a great value to the power market within just about a year of operation. The market requires very high technological expertise as it operates 48 half yearly I have your options each day following the very stringent timelines of 15 minutes for fleet collection, price discovery, I'm pleased to update that we have significantly upgraded our system, allowing this market to operate with nearly 100% availability. With our efforts towards creating a reliable real time market, RTM has now become a key differentiator for the business, contributing more than 20% of the total electricity traded on the exchange platform during this quarter. Additionally, the DISCOMS and Open Access Consumers have been proactively leveraging the RCM market to become to balance Real time demand supply variation, plant and implant outages and support during the extreme weather events. Recently, the The cost of distribution companies who were impacted by the cyclonic disturbances, Powhatan and Yefs Good significance is like in the real time market to support their power supply to affected areas. It clearly underlines the growing significance of the market in enabling distribution utilities and industries in addressing power demand supply and opportunities in the most competitive and reliable manner. In the market, the green market has recently seen a greater traction among the market participants. This market is now positioned as a key revenue for procuring Renewable MLP in a flexible manner and at the most competitive price. Very soon, we will also strengthen our green offering by launching Green Bay Market in Addition to the Existing Terminal Market. As per recently published data on our market for fiscal year 2021. Our efforts with our efforts to exchange market grew by 41% on year to year basis in FY 2021, whereas the bilateral market declined by 25% during the same period. The Indian CapEx has also been seen great entry trailer and update In volumes as well as participation, in fact, the volumes that were achieved during the last year, we are now trading in 1 month. And we are also seeing an increasing trend every month with growing momentum, appreciation among market participants and several key policy and regulatory initiatives such as discuss among GAAP under GST, We are geared towards developing a 5th and gas market in the country. At IEX, we are also working to develop other new market segments such as long duration contracts, The integrated greenwayed market as well as the ancillary market to expand and develop India's I will now share with you and overall economic and industry updates and how it played out for our business. While the industrial and economic activities showed growth momentum in early part of April 'twenty one, overall, the quarter remained challenging due to 2nd wave of COVID-nineteen pandemic. In April 2021, the manufacturing PMI stood at 55.5 percent. In June, it came down to 48.1 The impact of Fintech was also seen on the services side as the services PMI declined from 54 in April 2021 to 41.2 in June 2021. Despite the partial lockdown during the quarter, The electricity consumption showed a significant growth from the quarter and registering a growth of 17%, That is 340,000,000,000 units during this quarter with the revival of electronic activities. The industrial sales such as Gujarat, Maharashtra, Punjab, Telangana and Tamil Nadu were the key differentiator and contributed to this growth. The country saw its highest ever peak demand of 191 gigawatts in June, and This peak demand reached another height of 200 gigawatt in the month of July. As of June 2021, installed capacity of the Senti has reached 3 84 Gigawatts And an increase of 3.5% on year to year basis. Renewable electric capacity additions Has now reached to a level of 97 gigawatts with increase of 10.4% in 2021. The fastest growth of in renewable capacity underlines a gradual energy fix that has been underway and an increased impetus on building a decarbonize and sustainable energy economy. On the policy and regulatory front, The Electricity Amendment Bill 2021 that aims to relicense power supply, allowing multiple distributors in the same area and giving consumers the option to switch power supplier is expected to be introduced in the months of the Parliament. This will promote competition and efficiency in the distribution sector and in turn, lead to financial viability of the distribution companies. Recently, the cabinet approved reform based resulting power distribution scheme of Rupees 3,000 lakh crore Outlay for 5 years. A significant part of this outlay is earmarked for replacement of existing 25.4 meters by smart prepaid meters. Smart netting system will ensure proper merger pumping, billing and collection, leading to improvement in discount financial health. Under the upgrades of distribution infrastructure will reduce the AT and T losses in the sector. Government has also issued Draught National SAP Policy 2021, which stipulates the intention of the government to increase the share of spot market to 25% by the year 'twenty three, 'twenty four. The truck NEP underlines the most pertinent issues of the power sector with key focus on areas such as promotion of sustainable generation of electricity, development of adequate and efficient transmission system, revitalization of distribution and utilities as well as development of existing power markets through an increased global markets. Additionally, the government continues to focus on Initiatives to further deepen the power market. In its draft regulation, CRC has proposed a mechanism which allows low discharge centers to procure Power to be used for ancillary services through the electricity extenders for overall grid stability. The Ministry of Power issued a discussion tape for a handbit with the proposal to give go live to extenders from 1st April 2022 with antiquated MSM capacity. MOP has also issued the waiver of ISPS service for grid market for trading for the exchanges in GTM and GDAM markets, which will make trading of Greenbaud more competitive in further Tecom Green markets. Nokia also issued an order on TPA enrichment, allowing discounts to exit from TPA on completion of 25 years of useful life, Which will lead to the demand which was served by the PPA to be met by the exchange. Even the Tencent companies will seek will sell their power post PPA of the market and further deepen the market. These initiatives will create an efficient power sector in the country, Our financial and business performance, On a standalone basis, revenue for the quarter grew by 27.1% on year to year basis from INR80.54 crores In quarter 1 'twenty one to INR102.38 crores in quarter 1 of FY 'twenty two. The PAG driven by 48.4 percent with Pag Margin of 62.1 percent. During the quarter, electricity volume on the exchange grew by 42.9% on year to year basis, And it was BRL21.266 bps. The significant growth in volume was driven by Substantive increase in electricity consumption as well as the competitive price discussed on the exchange platform. Besides other factors such as availability of adequate domestic pools and wideband performance of the new market segments that is Altium and J10. The real time market completed 1 year of its launch on June 'twenty one, it has been one of the fastest growing market segments on that scale. The market saw an exceptional performance throughout the quarter and credit the highest ever volume of INR1.726 billion in the month of June 2021. Currently, RCM traded 4.635 rupees at an average price of INR3. It is very heartening to see that in a very short span of time, The market has become most dependable platform for the distribution utilities and industries in managing their close to real time demand supply variations. The quarter also saw green frontline market recording the highest ever monthly volume of 4.14 unused in June 2021. Cumulatively market traded at 9.37 venues and as always, but past green volume achieved in FY 'twenty one, It's good at 75. And our personal wind, Ceramic Market at iX has allowed Solar and wind rich states to sell excess energy in the market for the other states to meet their RPO. Industrial consumers are also increasingly buying green power from that sales. The market has been successfully enabling their participants to procure Delivery based solar and non solar renewable power in a practical way at a competitive price, thus greatly contributing towards the National Renewable Energy aspires. The cross border restricted trade has generated increased interest from the market participants from the neighboring South Asian countries. Nepal has already started formations on the exchange rate from 17th August April 2021. And since then, it is participating several in the exchange platform and has recorded 778 and U. S. 7XM. We are in discussion with Bhutan and Bangladesh, and we are also expected to join shortly on Nexledge platform. This exchange will help in developing an integrated South Asian regional power market and supporting efficient and sustainable Growth for the Energy sector in the entire region. Fiscal 2022 started with a challenging note With the strength of COVID-nineteen across the country, however, the spirit has been resilient and the economic fundamentals are strong. India's GDP is projected to grow at a rate of 9.5% in FY 'twenty two. The electricity consumption is also expected to see Good growth during this fiscal. We believe that energy markets are pivotal to total in transforming India's energy economy and IS is committed As the government is working towards creating a favorable policy and regulatory environment to transform the energy sector, We will continue to collaborate with the government and other industry stakeholders to realize this vision. Recently, On our 30th anniversary, on 28 June 2021, we launched Ignite India's Energy Dialogue on White Frag Power Markets, which comment key details such as Secretary Power, Principal Secretary Anurag Radeh, Chief Regulatory Affairs from CRC, besides several leaders from industry and overseas to discuss the way forward on developing India's power market. As a technology led company, we will continue to make investments to strengthen and advance our technology infrastructure. As mentioned earlier, we will continue to build upon our recently introduced initiatives such as member API for all market segments, Updating the web page interface to also provide online trading, availability of analytics and data insights to the market participants And also introduce a new mobile app. These measures will enable us to make the overall trading experience seamless and intuitive to besides Polystyrene Exchange is a best in class technology product platform. With better availability of domestic code, Trendless policy and regulatory framework in place, growth momentum in the existing markets as well as the upcoming new market segments such as loan duration contracts, Derivatives, green Bayard Market, Altieri Market and Integrated Bayard Market will make the power markets much more dynamic than before. For that, there are also discussions to introduce capacity market to ensure We saw very good in the sector. Along with this, we've been creating volumes on cash exchange. We are very positive about the growth potential of the company. Thank you. Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. First question comes from Mohit Kumar from Dam Capital. Please go ahead. Yes, sir. Good afternoon. Congratulations on a very, very good quarter. So my first question is, what are the kind of opportunity with Arise Pro Ancillary Services. In the sense, is it possible to put some number to it? And services food exchange, it is expected that this could be about 84,000 megawatts. But then the use will be depending on the real time condition. And role of exchange will be only to collect the bid, track the bid and pass it on to the MLDC. It is an industry who will have to, depending on the requirement, use this capacity. Okay. Secondly, what will be open access volumes in RTM market? And when can we expect the GTM to be launched GTM market to be launched? Open access volume in the RCM market is very less. It is mostly the distribution company who do the transaction, I think it is about 5% to 10% only in case of open access. And JETAN, We have already filed our petition with the regulator. In fact, there was a hearing in the CRC today only. And we are expecting that by end of August, This should have approval from GRC, and we should be able to launch it by end of August. The last question, has there Any incremental discussion in the last few months apart from the discussion paper floated by the Ministry of Power? The last paper is by Mr. Power. And on that, we have invited comments from the different stakeholders. But what we understand from the different stakeholders that distribution companies and vendors in particular, they are not very comfortable with distributors and people And have expressed their apprehensions and their concerns to the Ministry of Power. Understood, sir. Thank you, sir, and best of luck. Thank you. Thank you. Thank you, sir. Next question comes from Varaneet from Spark Capital. Please go ahead. Yes. Good afternoon, sir. Sir, you just mentioned that there have been some concerns raised about the NBV. Could you just Some of the concerns the states have raised are basically again the right So, we saw power, right, to reschedule the power during the day depending on the demand supply variation. That is one big flexibility which Today, states have and that will not be there. And further, you know the states many states have contracted CPAs Paying capacity charges and they will have to continue to pay capacity charges, whereas the states who have not signed PPA will enjoy their power Without paying capacity charges. So there are I mean, concerns that will raise that we should first look at the resource adequacy, Maybe introduce capacity markets kind of concept and then talk about Ambiq. That Ambiq is something that can be introduced only when we have all other The settlement mechanism itself is a very, very complex process. How the disputes between the generator and response will be resolved? There are few things which we understand they have raised. But even these things again come to a discussion, we'll confirm about that. Sure, sir. So you are mentioning that you need a capacity market instead of this MBD mechanism. Can you highlight Before the ending, there should be a capacity market and ensure that each state has adequate contracted adequate capacity to meet their demand. Correct. So that's what I'm saying. So could you elaborate little more on how this capacity market will The structured so there will be only capacity contracted and the price will be discovered in the exchanges. So how will that be if it works, sir? Normally, capacity market is a mandatory market. The regulatory commissions in each state, we are supposed to Assess the demand for the next 5 years and then see what kind of capacity is contracted and what kind of capacity is required, And then we will ask distribution companies to contract capacity for the next 5 years accordingly. Normally, this kind of capacity contracting is done through the exchanges. But then this also can be done through a bidding route. Right, right. So this if at all happens, it will be for incremental capacities requirement. My next question is on the integrated BAM market. So I'm just trying to understand what Will be the need that this will solve, which the existing dam market is not addressing? As you have seen in the electricity market, TAM market is not the prices, sir. It is a price matching. No, I meant the dam, sir. So, integrated dam, so what is the need that it is going to solve, which the existing dam market is not solving? So who will be interested to buy in yes, yes, sir, go ahead. In the TAM market, it is the price matching with what takes place. In the day ahead market, it is a price discovery work takes place. Our expense are more comfortable with the price discovery process The cash price discovery process is a more transparent process. Distribution companies, they want from the regulatory point of view, the debt market, It's a BAM market. And that is why in the conventional electricity also, the volumes are more in the BAM market than in the BAM Perfect. And in the DAN market, you these are collective transactions. You are basically acting as an aggregator both on the sell side and the buy side. So this is a more efficient market, and that is why government is also saying that we should introduce DAN market So that green generators, they have a comfort that, yes, there is a transparent market available. Correct. But there is already a mechanism for them to do that through the DTAM market or GTAM market, right? So just trying to understand How this product will be? Present mechanism is only through the GTM market, the market where security can sell power for the full day Or maybe for full week, but there is no fan market at the moment. In the gas market, one can sell power for any particular time block on day ahead basis. And in the gas market, Highpower basically based on the demand, they don't have to buy a constant power throughout the day. So, DAN market provides more flexibility. Okay. I will take this offline. My final question is on the derivatives product. Now what will be the kind of arrangement we will have with, say, MCX Mr. Baidu, sorry, you are in the queue. You may join back the queue for your further questions, sir. Thank you. Oh, yes. You got me off. Yes, sir. Thank you, sir. Next question comes from Mr. Sumit Kishore from Axis Capital. Please go ahead, sir. Thank you, sir. My first question is the peak demand of 200 gigawatts in July was during the afternoon time. Our entire commercial demand may not have come back. Traction demand is lower than pre COVID levels. How would you meet this weak demand number? And how would you see the what would be your expectation for fresh heat demand through the balance fiscal FY 'twenty two, sir? The peak demand in the month of July, which has cost 200 gigawatts, was on a particular day. And what I'm seeing is that demand is remaining at a very high level regularly. So the power consumption is increasing and power consumption in the Q1 has increased in the country by 17%. So it was on a low base because last year we had long term. But we are seeing now also there is a good increase in the power. And as far as peak demand is concerned, in the month of September, when hydro That receipts and it is a high humid environment and the agricultural demand is also there. It may cross even 200 gigawatts. It may be something around 210, 215 gigawatts. Okay. So what would be your update on the time line for long term REC contracts and resumption of trading in REC versus what you communicated to us 1 question, congrats. I'm really unable to say any time line because the case is pending in the Supreme Court. There is nothing to be done in that case. It is only a one day hearing because Government of India has already filed affidavit that Government of India, please. I read about the jurisdiction, Supreme Court only has to basically adopt that and issue a clarification. But unfortunately, because of the COVID only urgent issues are being taken up. This matter has not come up for hearing. And I think it is almost about 1.5 years now and nothing has happened on this. So we were very hopeful of last year only, Sorry, I'm unable to give any diagram on this. Should we factor in LDT for the balance fiscal FY22 or the last quarter or should we complete the rule it out? I think last quarter will be trade, Espinosa. Okay. And on resumption of trading in REC, sir? Yes. REC Trading in the 1st week of July, there were few gains, but then nothing concrete. Ministry of Power has been made a party to that because we have already discussed some paper issued by Ministry of Power also on the REC Floor and Floor and Floor and Storage. So I think next letter hearing is sometime in the month of August. So only after we get the order. As of now, it looks like it may be sometime only in September, not before that. The order will come in September, but trading can resume only after how many months from the order? No, no. Once the The order comes, we didn't start the resuming from the next day itself. But the point is, you can't really say anything about the order. Yes. Currently, when they will issue the order, it's expected that the order should come sometime in the month of September. But whether it will come or not, something you say is that. Okay. Thank you so much. Thank you, sir. And may join the queue for further questions. Next question comes from Kunal Tanvi from Banyan Tree Advisers Private Limited. Please go ahead. I had one question around the RTM market. We already have the sense that We have launched this product to even take care of the BSN mechanism that is there in the short term market. When we look at the FY 'twenty one The numbers for the short term marketing market fees and the biometrics volumes that come out. And the DSM Well, you said you know fell down to the last year level itself. Whereas we have seen a significant rise in the RPM volumes. Like, how should one be into this? Like, maybe asking just questions for a while now, but not being able to Get a drift over it. Like, is it that we have green market share from the biometrics? Like, how should one yield into the growth in the RCM market, whereas, first, Yes. RCM market was not for replacing the DSM alone. That was one intent, But otherwise, the intent was basically to meet demand variations on the real time basis. And this demand variation on real time basis is That means because of the renewable generation and also office of units or things like that. So See, in the earlier system, after the Tejas market, there was no other opportunity for distribution company to purchase power. Now they have another option available on real time basis. And we are using this market very effectively to benefit demand supply ratio. As far as DSN is concerned, I think on that front, we also did some analysis and regulatory commissions also have done some analysis. And what we have come to a conclusion now is that since the DSM rate is the average rate of the head markets, There is no incentive for distribution companies to not to withdraw on our overdraft on the grid And by from the ATS. Well, the ATSM rate is almost same as the ATSM rate. So that is why now, regulatory, what we understand, reviewing this DSM mechanism And maybe the DSM rates will be made as final rate so that there will be incentive for them to buy power in the RTM market than to overdraft on the grid. So only when that happens, maybe the DSM volume will start shifting to the RTM asset. Sarkis, those contents have reduced significantly. Okay, sure. So like you said, right, you assume that the RDM market is the injunction of sequential of RDM market right of Senegal, We are not restricted to 23 BUs, which is like the BSM, which is BSM plus the other short term market that we see On an overall basis, it's what RTM is trying to target. Is that understanding right? Yes, yes, yes. RTM market is not limited to the DSM volume. RTM market is going to meet the requirement of distribution company on the real time basis and also take care of the demand supply variations and So I'm sure volume in this market, the opportunity is much larger. DSM reduction of DSM is one component of the DSM market, RTE market. Sure, sure. So that was my first question. Thanks, Bharat. The second question is, in terms of the new financial new revenues, We have been short the LDC and REC something that has been sourced from the regulatory perspective. Apart from that, like, do we have any plans for new products in the coming fiscal Apart from the GBM which we have already discussed, I mean, follow on that. The new product is one is long duration contract that I told you maybe in the first last week, last quarter of this year, it may happen. GTAM should happen in the month of August, last week of August. Then REC trading, that should resume From September, Easter trading also should start from August. Now Easter trading happens once in 3 year time. So it is due this year. So on that also, discussions are in the advanced phase now, and we are expecting trading to start in the month of August. And in addition to this, we are continuously working on our existing these 2 new products, which is RCM and the GTM market and the software trade. Sure. A follow-up on that in the first, right, Mosquets, right, like, tell me through some further on the kind of opportunities we see next 3 to 5 years, Like, because what we understand is that only day ahead market productive, what seats we cater to for that particular So how should one look at that particular market from a C2 for here this Are you talking about long term market for a 3 to 5 years contract? No. Cross trade market, cross border market, How should one look at from a 3 to 5 year consulting meeting? Okay. Okay. The cross border market, We are expecting in the next 5 years, the volume in this market should be Something about 8,000,000,000 to 10,000,000,000 units kind of thing. It also depends on the transmission capacity between the countries The transmission constraints are there that we have limited capacity, whereas the demand in this country is more. So I think in the next 5 years, this market is probably about 8 to 10 years. Sure. Thanks. I'll get back in the queue. Thanks a lot for answering my questions. Thank you, sir. Next question comes from Devansh Nigotia from Securities Investment Management. Please go ahead. Thanks for the opportunity and congratulations on good numbers. So one is in case of There is no problem. Yes. Mr. Devansh? Hello? Yes. Hello? We are not audible, sir. Can you repeat your question? Yes. Yes. Mr. Devansh? Hello, sir? Yes. Hello. Hello. Yes. Can you hear me? Am I audible? Yes, sir. You're audible. Please go ahead, sir. Yes. Sir, in case of PPS, which you know are completing 25 years and are expiring, so do we have any kind of quantum on the volume On the power volume, which will be without PPS, let's say, over the next 1 or 2 years, do we have any kind of numbers? Yes. I I mean, what we have seen from the newspapers and from our discussions, many states Are willing to exit from the gas based power plants because these gas based plants are more than 25 years old. Cost of premise gas availability is very low. Import to LNG gas is very costly. So these plants are operating at a clear level of hardly above 25%. And the states have to pay capacity charge for the 200% capacity. That is why the states have now because Since 25 years, that is lower, they want to exit from those plants. Okay. Any kind of There are 1 or 2 thermal plants also Where the variable cost is high and 25 years is over. So our estimate is it could be about 4000 to 5000 megawatt capacity. Okay. RMB45 1,000 to RMB5000 1,000. And in case of e search, what would be our expectation in terms of volumes? So RMB 1300 1,000 was which was done 3 years back. Yes, sir. This year should be about 3.5 bu. Okay. 3,500,000,000 units. 35, 3, 35,000,000 units. 35 lakh units. 35 lakh certificates. Okay. Okay. And sir, in case of green thermometer market, I mean, The volume has been very robust over the last 1 month. So some soft points, if you can give both on the demand side and supply side, What are the things that are happening that has really changed the scale of volume? And how should one really look at this number going forward? Green market is active because during this time, wind generation is very high. That is one reason. And the power which is being sold in the green market is sold by the distribution company. The states who have contracted Green Power more than their Rafi obligation. RPS, they were taking down those plants. Now they are selling the flowers. So it is good for the generators. They are not being asked to back down. It is good for the states because we are not able to get additional revenue by selling the power in the market. So these trends should continue for the next 4, 5 months till the wind is high, wind development is high. And from October, it will be mainly so far. Okay. Okay. So April to September would be the main season for wind and solar will be throughout the year? Yes, yes. Okay, okay. Thanks a lot, sir, for addressing all questions. I'll join back in the queue. Thank you. Thank you, sir. Next question comes from Prithviraj from Unifi Capital. Please go ahead. Good question. I mean, for the long duration contracts, so how are we planning for the margin mechanism here? We have designed the margin momentum, where we will take margins maybe for The open access charges and then maybe for 2 days or 3 days of margin for the transaction and then they will have to pay every day basis depending on the quantum of our delivered. Okay. So you collect margin on a rolling basis for every 3 days? Yes, yes, rolling basis. Yes, yes, on rolling basis. You can't comment on this. Okay. At once. Right. And second on the DRAM service launch, so what can be the volume potential here? Very difficult to say that because in the green market, it is only the states who are selling it. There are a couple of generators also, but there's Renewable power merchant capacity quantity is very, very low at the moment. But Looking at the rate of the last one year, I think the rate is Around INR 3.20 percent for the solar generation and it is around INR 3.90 for the wind generation. So looking at these dates, maybe generators will now also go ahead for setting up merchant capacity. I think this market will need some time to develop. Okay. That's it, sir. Thank you. Thank you, sir. Next question comes from Bharat Seth from Quest Investment. Please go ahead. Sir, recently, there One more player has been allowed to open the exchange. So can you throw some light on the Competitive scenario that may emerge post that player starts operating? 1st of all, let me correct you. There is already 1 more player who is there in the market. 1 more is there, 1 more is allowed? Yes, sir. One word is allowed now. Sir, one word is allowed now. Sir, one word is for the last 13 years, we were 2 in the market, And we have more than 95% market share. So, see, as an exchange, Our job is to create value for the participants. Our job is to Innovate, provide new products, interact with the customers, understand the needs and provide new products to meet the requirement, Provide efficient technology platform. Okay. And this is something what we have been doing in the last 12 years. And because of that, we have ensured the customer loyalty. And I'm sure this will continue in future also and we will be able Okay. Sir, on this inter country that is Nepal, Nadezhir in Bhutan. So this market, are we expecting to operate both the side? So India selling as well as buying Or it will be one side and what will be the payment mechanism to ensure that this business continue on a longer term? This payment mechanism is in rupee because we have to appoint the Indian agency to do transactions on their behalf. Okay. And second is, in case of Bangladesh in Nepal, since these countries have deficit of power, mostly it is buy by them. And in case of Sutan, since they are not close with power, maybe it will be it is going to be sell light. Okay. And our rate will be the same, I mean, charging 2 per se, what is that? Yes, yes, yes. Our fee is same, the same. Okay. Thank you very much. Thank you, sir. Thank you. Next question comes from Swarnam Maheshwari from Edelweiss. Please go ahead. Yes. Hello, sir. Good afternoon and congratulations on a good set of numbers. Two questions. Sir, first, on the REC side, Now assuming that this year also more trading happens and we actually fast forward to FY 'twenty three. So do you think that the bunching up of trade will happen for FY 'twenty one as far as for FY 'twenty two? And you can see Something like 12,000,000,000 to 15,000,000,000 units of volume in FY 'twenty three? Or is there a case that the for Participants to actually go for their RPO obligations there, they have already started sourcing through your GTAM product and going forward, GTAM also. Yes. First of all, I'm not willing to assume that the trading is not happening this year. I told you, And I'm sure, sir, auto should come in the month of September. So we will have good 6, 7 months for trading of RC market and we should see good holding growth in this market. But in case by any chance The product won't come. And yes, the RFP obligation will get carried forward and obligated NP was supposed to meet the requirement. Part of that requirement is also met with the GTM market. But what we have seen in the GTM market, it is a different set of buyers. So maybe the utilities who were buying our ASKs, some of them Are also participating in the GTAM, but then we have also new participants in the GTAM market. Okay. So you mean that in GTAM or GTAM, the set of buyers is not the ones really looking for their RPO obligations? But we are new buyers also. Okay. Got it. Right. And sir, just a very small observation. So we have given the segmented reporting. And I was just looking at the gas exchange revenues. So I was just wondering that why, 1st of all, there will be revenues from gas exchange in 30th June 2020, which is Q1 FY 'twenty one because we have not commenced the business at that point in time. And second, why will the gas exchange revenues negative in Q4 FY 'twenty Can I ask my colleague, Mr? Vinit Alalka, to respond to this question? Yes. 1st of all, the exchange was launched in the June 2020, so 1 or 2 days to place during that initial phase. So that's why some revenue was expiring for the gas exchange during the Q1 of financial year 'twenty. In the March Q4 of financial year 'twenty one, there was a notification entry was made because whatever, Okay. So the IT got rectified Thank you, sir. Yes. For the fee, the income earned by the exchange and the administrative debt in Mumbai, they got effort to 3.5 years. Alright. Okay. Got it, sir. Right, sir. Thank you so much. I'll get back in queue. Thank you, sir. And I request the speaker to increase the volume because the volume is very low. Thank you, sir. The next question comes from Sujit Jain from ASK Group. Please go ahead. Congratulations on a good set of numbers. Sir, my question is Similar to what one previous participant said in the last week, which is what will be the difference between because you mentioned in the presser, We'll be launching LDC DRAM integrated DRAM. So what is the difference between DRAM and integrated DRAM? No, no, it is integrated market. Integrated market consists of, 1st, A renewable generator can sell power in the GTM market. And if the power is not We are in the GTAM market, then we have the option to transfer it within the damn market. That is why it is known as integrated Market. So and it is the DRAM is same. There is no separate DRAM market. DRAM is a part of the integrated market. And what is the traction in our policy advocacy effort where in solar power options, a certain percentage can be allowed as merchant power Because that will completely open up a new area for the exchanges and for the short term markets. We have been doing this policy at OKC. And in fact, if you see safety tenders, They have already writing that generators can keep up to 15% capacity flow sales in the market. It's a different story that the generators at the moment are not taking any capacity for sale in the market. But looking at the clearing price, Which are 2nd place in the GTM market. What we know, understand that there are generators who are willing to keep some capacity for selling the market also, And we are also working with Government of India to bring new products to become this green market in the country. See, one of the product is which is popular in the Western countries that With industries, you know industries or the MNCs or the data centers, there are companies who are ESG companies, they want to go green. So their demand pattern is in a uniform, but the power Available solar power is available only during particular hours of day. And it is very difficult for these companies to Go through the process of scheduling this tower. So what they do is they get into a contract with their renewable generator I'm committing you the rate under the PPA. You sell this power in the market, in the conventional market, That is the end market of last year market. And if the rate is lower than the TP rate, I'll pay the difference. And you will give me the DIN attribute of that so that we can comply with the ESE requirement. These are the kind of products We are also talking to Ma'am, MNRE and Mr. Apollo, and they are very receptive of this idea. So we are working on this kind of products. I'm sure in the time to come within the next 1 or 2 years, you will find good people in this market also. So in a market, it takes some time to develop. So we will have to work on these kind of new products, 1st group policy and book receipt, then talk to the generators. And I'm quite hopeful that this market And one last question is on other streams of revenues which is globally exchanged for us, which is basically You internally have a division which actually creates software and products for the exchange itself. That can be put in an entity, As of now, My software team is busy in developing products for MyExcel business only. I mean, in the last one year, we have Developed new product for the RTM market, GTM market, cross border, and we are working on developing Integrated market, we will have GDAM and G and Damsa together. Then we are also working on, I mean, this web based platform, mobile app. So team is busy with developing this product. I don't think the next 2, 3 years, they will have time to do work for us. This is a very, very specialized area. So we would like them to continue to do with this exchange of our fund activities. You said about analytics. Today, we are doing a lot of analytics, but then we are providing this analytics to our sector participants free of cost basically to create awareness for the market, And it is a marketing activity. Maybe in future, when we find that, yes, There is a potential to earn some revenue out of it. We can explore that, but today we are doing it free of cost, providing the reliance to the market participants And telling them how they can optimize their power procurement costs and how can they take advantage of the market. Thank you so much. Thank you, sir. Next question comes from Ronak Chaddha from Oregon Capital. Please go ahead. Hi, sir. Thanks for the opportunity. I just have one question. It is partly answered. I'll just repeat myself. So share of renewables is going up And the whole power generation sector going forward, how does this shift to a higher share of renewal in the impact IES business? You briefly touched upon this point, but if you could elaborate more, is it positive, negative or neutral on par? Thank you. Every change provides opportunity. I believe in that. So shift to high renewable is also a good opportunity, And we are working on that, how to make use of that. As I told you, renewable itself is going to provide opportunity. We have introduced GTAM market, we are going to introduce GTAM market. We are working to develop new products in this market. And One thing is, one thing that has happened is because of the high renewable, the pressure on that coal has reduced now. The coal availability has improved and auction rate for the coal has reduced. As a result of that, the rate in that Daim market has reduced. So from that point of view also, renewable is positive for that Anything else you want? No, sir. Thank you. Thank you, sir. Next question comes from Alok Ranjan from India Infoline Asset Management Company. Please go ahead. Hi. Good afternoon, sir. One clarification on the RTM thing that you were mentioning, that the open access is 5% to 10%, and most of the Volume comes from the distribution. And you mentioned that it's not coming majorly from the DSM. So I want to understand, Is it coming within the short term volume or it was outside the short term volume earlier and a new Volume has got created into the short term volume overall. What I I mean based on the analysis what we have done, what I find is that this is the additional volume where either the load shedding was happening Our second round was happening. So I think now It is a real time market where this optimum utilization of these things are happening. Got it. I already picked 200 megawatt or 500 megawatt unit rates. Distribution company had no option to purchase power to meet the demand. Now there are the option available. Got it, sir. Sorry, the overall, Especially in the slide number where you have given the total breakup of the how the units gets distributed in the long term bilateral. So one opportunity is the DSM, which is 1.8%. And within the bilateral, 3.4%, some opportunity is there for us in the near term. Then either the long term is there from where you are saying that 4 to 5 gigawatts can come out of the PPA? Or is it like the new capacity addition that is happening, a major part is coming into this short term market? See, opportunity for the exchange is coming from. One is that Shift is happening from the bilateral to exchange. Over the years, if you see the volume which was happening in the bilateral is going down and exchange volume is increasing. 2nd opportunity is shift from the DSM in the real time market. I'm sure after the Revision of the ASR mechanism rates, that will also happen. And thirdly is the incremental demand. That is the biggest opportunity. If the demand in the country is increasing at a rate of 5%, which means that 70,000,000,000 to 75,000,000,000 units is additional demand. And good part of this demand will come to the short term market. And thirdly, FOC is again exiting the long term PPA after the useful life. So Looking at all these things, I personally feel that every year, there is opportunity in the market. Opportunities for the short term market is about It can be about US50 $1,000,000,000 Got it. So a last clarification from my side. In our total volume, what is the direct industrial share and how the trend is on that side? This year, the industry is about 20%. 20% of the volume is Directly purchased by industries, right? Basically, your training and the company? Yes. Okay. Yes. And how it has how the trend it has been done over the last, let's say, 2, 3 years? Trend is share of industry is going down. And it is mainly because of the barriers which are created by the Yes, it's state regulatory commissions. Okay. And to be precise, the Share of open access consumers in this quarter was 15% and last year it was 20%. Thank you, sir. Next question comes from S. Ramesh from Nirmal Bank Equities. Please go ahead. Hello and thank you very much. On the gas exchange, can you share with us what the volumes are doing? Eventually, what is the kind of Market share you expect to get for volume share in your guidance change. How does the overall gas consumption in the Indian markets? I think as far as the gas exchange is concerned, time has not come to talk about the volume on the exchange platform because volume what has happened is very, very small. What is more important is to create a framework for gas market. So we are working with the government and regulator to create that framework. And I'm happy to share with you that what is now happening for creating these envelopes. One of the biggest envelopes required is there is no system operator in the gas market like we have in the power sector, The SLDC, RLDC and MLDC. So no government actually has issued a discussion paper to create gas transportation system operator. Secondly, bringing gas under GSP so that you can have in the standard contracts across the country. On that also what is happening, the advertisement defer to Yes, Bhansi. 3rd is, rest of my estimate pipeline tariff. On that also regulatory commission is working. So I think and then 4th is infrastructure. Lot of RLNG terminals, what is happening on that now? And what I understand, RLNG reclassification capacity is going to be doubled in the next 2 years from 40,000,000 tonne to about 70,000,000 tonne in the Yes. There are terminals which are under construction on the East Coast and the South Coast. So these terminals will take the mission and the pipeline also, I mean, in the eastern side in the southern India is under construction. So we will have integrated cash within the country. And with these annapolis and the infrastructure in place, Well, I think we will see meaningful volume growth on that exchange platform. So, if you have to achieve a certain amount of critical mass in terms of volumes and revenues, if you look at the current asset and fee for your Our business, would the capital investment be comparable or similar revenue or will it be different for the gas exchange? Yes. As far as the investment is concerned, I think it is going to be the same kind of investment that we made in the power sector In the power exchange, only thing is in power exchange, over the year, because of development of new products, there has been additional CapEx on the technology side. And then the team size is also much bigger because our interactions is with all the states now. So in the gas exchange, we have started the activity. Business development team is working on the business side and then we have a Regarding squeezing one more question. Any thoughts on emission clearing, chemicals, similar to what they're doing in Europe? Bharat, can you repeat the question? Any thoughts, any calls on developing products similar to the emission trading products you have in Europe? Yes. And the same trading products, this is something we have again talking about it. We have analyzed different markets which Operating in the European countries. But then again, this is something again we are discussing with Bureau of Energy Efficiency To create this market, that's it. Thank you very much. Thank you very much. Yes. Thanks a lot. That was very helpful. Thank you very much and have a good day. Thank you. Thank you, sir. Next question comes from Praveen Kumar from Actus. Please go ahead. Hello. Good afternoon. Thanks for the opportunity. My question was on the cash Investment underlying on the books of NOK400 crores. Could you throw some light on what is the plan to utilize, Prakash? As of hello, last year, we started the GAAP exchange. So there was Good investment, Medine Gas Exchange. We are also looking at other opportunities. And otherwise, we will give it back to the investors. Okay. Okay. We have a policy of giving high dividend. We have also declared yesterday final dividend. Earlier we have INR2.5, now it is INR1.5, so totally about INR4 on INR1 share. Okay. Thank you. Thank you, sir. Next question comes from Abhishek Puri from Axis Capital. Please go ahead. Yes. Good afternoon, sir. Sir, two questions. 1, just To understand the GTAM opportunity better, you've explained some part of it, but you used to lose out in high wind season and Whenever there's higher solar production, because that excess electricity used to go waste and there was curtailment, Can that be traded back on GTAM? And is that opportunity pretty large if you can spell out that amount that can come in here through Theta. And second is, you are getting a lot of levers, a lot of new products over the next 1 to 2 years, including derivative settlements, long term GTAM. If you can spell out the opportunity and the I said you're looking for the exchanges in the next, say, 3 to 5 years period. Abhije, I will not like to make any estimate for the future, but I can only tell you one thing. Any new product which we have introduced has given us significant volume. RTM market we introduced last year. In 1 year, I think we got something about 12,000,000,000 units out of that. And this year, it is 1,500,000,000 unit every month, more than that. So this market should give us something about 18 to 20,000,000 units in this year. GTAN market So which is why Which is why I'm asking, sir, because last year And we started in other data market. We were doing just about 2,300,000 units a day. In this month, we are doing almost about 15,000,000 units a day. In the month of July, on a single day, we did a trading of 150,000,000 units. So our job is to introduce products, interact with the participants, tell them What is product is how can that can benefit our profit? And I think I believe, I think in this sector, the opportunity side is very, very large. So our job is to tell the market participants. And I'm sure I mean, you are that kind of growth which is happening, 40% growth, And if you look at our 3rd, 4th quarter end this quarter, continuously it is a 40% growth. It is all happening rather than new products. And I'm sure the new products which we are talking about long duration contracts of the 3 dams, In this context also, there will be good volume growth. Difficult to make any estimate on that, Sir, why I asked this question is because last year when we had the analyst meet and we discussed about the opportunity in the RTM market, I think it was explained at 15,000,000,000 to 18,000,000,000 units. We have already crossed that within 1 year of the launch. And that's why I'm just trying to understand if you have the same estimate for the other products that are coming in. Approximate number, I'm not will not hold you up for that. But As an opportunity side, what market you can address with those opportunities over the next 3 year period will help us model and understand the company's growth path better. In case of long duration contracts, the market is the volume happening in the biotech market. So that is the addressable market size, which is something about 40,000,000,000 units. So it depends on how much of All of that we are able to do it. And in case of GTAM market, GTAM market spend is very, very Yes, I mean, if Government of India is talking about creating 175 gigawatt by 2022 and 460 gigawatt by 2,030, I think the renewable generation is going to be very, very high in the country, and we should get good share out of that because Now distribution companies are not preferring PPA for the entire requirement. We are only getting into PPA for the best load and that's it for the market. They want to pay for that. Thank you so much, Rambam. We will work on GDA market to Make estimates for the next 5 years, frankly speaking, I don't make any real estimate on that. We were more concentrating more on the product And interacting with the participants, but then next time I'll give you some estimate on this also. That will be great, sir. Thank you. All the best. Thank you. Thank you, sir. Ladies and gentlemen, that would be the last question for the day. Now I hand over the floor to the management for closing comments. When the market is definitely a recent development and it was good interaction, we look forward to similar interactions in the next quarter. Thank you. Thank you very much. Thank you, sir. Thank you, everyone. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using Dursabha's conference call service. You may disconnect your lines now. Thank you and have a pleasant evening.